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Largo Inc T.LGO

Alternate Symbol(s):  LGO

Largo Inc. is a Canada-based producer and supplier of vanadium products. The Company’s segments include sales & trading, mine properties, corporate, exploration and evaluation properties (E&E properties), Largo Clean Energy and Largo Physical Vanadium. Its VPURE and VPURE+ products, which are sourced from one of the vanadium deposits at the Company's Maracas Menchen Mine in Brazil. The Company is also focused on the advancement of renewable energy storage solutions through Largo Clean Energy and its vanadium redox flow battery technology (VRFB). The Company is also engaged in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations, in addition to advancing its United States-based clean energy division with its VCHARGE vanadium batteries. VPURE+ Flakes are used in the production of master alloys, where it provides high strength-to-weight ratios for the titanium alloy and aerospace industries.


TSX:LGO - Post by User

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Post by kha341on Mar 10, 2023 3:20pm
208 Views
Post# 35331481

What if there was no non-recurring cost in Q4-22?

What if there was no non-recurring cost in Q4-22?

From Largo’s NR:

1) Net loss of $15.6 million in Q4 2022. 

2) In Q4 2022, the Company’s net loss included approximately $6.3 million of non-recurring expenditures


The following chart shows that even if the non-recurring expenditures were removed from the equation Largo would still have a considerable loss of (US$9.3M) out of a revenue of US$47.5M in Q4-22.  The unsettling realization is that, even without incurring any non-recurring cost, Largo must realize a revenue per pound well above US$7.7 (i.e the EuroV2O5 benchmark price must be way north of US$8.25/lb) for the company to break even. Note that Roskill considers US$8.00/lb as a good price for standard V2O5. 

A clear indication that, even without the non-recurring expenditures,  Largo is not a low-cost producer anymore.

Thank God that the average benchmark price for EuroV2O5 is in the US$10/lb range in Q1-23. Now at what revenue per pound can Paul Vollant realize in Q1-23? Who knows.


2022

All in US$

Euro2O5 Benchmark Price per lb

V2O5 equivalence Sales Price per lb

Total Revenue

Non Recurring Costs

Net (Loss)

Net (Loss) excluding Non Recurring Costs

Q4

$8.25

$7.77

$47.5M

$6.3M

($15.6M)

($9.3M)



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